The Child Sex Slavery Sellout
How an online hub of sex trafficking weaves a web of lies to keep profits flowing, at untold cost to children’s lives.
This is the fourth of a seven-part exposé of the exploitation of children for sex by the classified ads portal Backpage.com. Click here to see the previous installment.
On April 6, Backpage.com was abruptly shut down by the FBI and a string of other U.S. law enforcement entities. Superimposed on the website’s home page was a notice from the federal government, announcing that Backpage and its affiliates were seized “as part of an enforcement action” carried out by the FBI, the Department of Justice (DOJ), the Internal Revenue Service, the Joint Regional Intelligence Center and the U.S. Postal Inspection Service. Displayed at the top of the notice were the logos of the five federal organizations.
No immediate details of the enforcement action were available. According to the notice, Backpage.com was seized with the support of the U.S. Attorney’s Office for the District of Arizona, the U.S. DOJ’s Child Exploitation and Obscenity Section, the U.S. Attorney’s Office for the Central District of California, and the offices of the attorney generals of California and Texas.
The website’s seizure brought into sharp focus a slew of questionable corporate dealings that the owners, Jim Larkin and Michael Lacey, have long been accused of. In 2002, the DOJ brought an anti-trust lawsuit against New Times Media, the alternative newsweekly chain named after the Phoenix-based tabloid that Larkin and Lacey founded. As the DOJ put it, New Times Media colluded illegally with the Village Voice group of newspapers—named after its flagship, the iconic anti-establishment tabloid in New York City—to shut down unprofitable papers they owned in Los Angeles and Cleveland.
Larkin and Lacey later acquired the Village Voice group in 2005 and merged the two media companies to form Village Voice Media Holdings, which published 17 free weekly newspapers with a combined circulation of 1.8 million. Larkin and Lacey eventually sold Village Voice Media in 2015 in a management buyout plan that did not include Backpage. At the same time, as the regular advertising base for alt-weeklies had been crashing as a result of competition from the internet, classified staples such as nightlife, massage and escort businesses had also migrated to the web, helping Backpage become the kingpin of this dark world.
In the face of intense public and government scrutiny, and just prior to the Village Voice Group buyout, Larkin and Lacey sold Backpage to UGC Tech Group, a Netherlands-based company that runs a web of classified ads websites. The 2014 sale, which is still under criminal investigation by the California Department of Justice, occurred through a tangle of U.S. and international shell companies. Backpage CEO Carl Ferrer is UGC Tech’s only named partner. According to the congressional investigation, Backpage never actually changed hands from its true owners and controlling shareholders—Larkin and Lacey.
While the California Justice Department gained traction against Backpage in late 2016, the website’s executives for months disregarded a subpoena to appear in Washington, D.C., before a U.S. Senate subcommittee and turn over records of the company’s internal communications and disclose other documents. When they did not respond, the Senate subcommittee members held the executives in civil contempt—the first time the Senate had to take such an action in 20 years—finally forcing Backpage to comply. The executives were then met with a bipartisan report on January 9, 2017 that was stunning.
The subcommittee’s 20-month probe into the website’s business activities led to a report that said it all in its title: “Backpage.com’s Knowing Facilitation of Online Sex Trafficking.” The Senate investigation found that the company hadn’t merely been hosting third-party content. Rather, it had been altering posts by users since at least 2006, seriously thereby damaging its central immunity defense claim that it was merely a platform, and played no active role in ad postings.
“Backpage has maintained a practice of altering ads before publication by deleting words, phrases, and images indicative of an illegal transaction,” the Senate report said. The effect was to allow ads involving children to appear, rather than screening them to prevent publication.
To be continued.